Time to market elongate six to eight months

"Return to a normal market", that's what wants to the Minister of housing, Jean-Louis Borloo, recently welcomed before MPs to finally "loosen the grip" thanks to its policy of revival of the construction. 410,000 In last year's site should indeed be exceeded this year with currently started housing, a record. "Selling prices are now down and found the rent increase in 2006 is the lowest since 1999," says his Department. After years of growth accumulated by 120 since 1997, is the break finally in sight When the lesser two-piece is worth at least 120,000 euros in town and double in Paris, it would in any case welcome. In March, the annual growth rate was still 14.5 according to the Insee and in late June, 8 from the National Federation of estate agents (Fnaim).

For Marc Touati, head of economic studies in Natexis Banque Populaire, needless to turn around the pot, there is a housing bubble: "values jumped 110 over the past seven years, when the GDP has increased by 35, or a 1 to 4 difference between the actual value, i.e. the wealth created in France increased by inflation", and the financial value. However, in 1991, year of initiation of the previous real estate crisis, the gap was that... "3.5." Most observers are less affirmative, but they increasingly expect a moderation of prices and, why not, a decline next year. Beep (Office of information and economic forecasts) and bet on limited to 6 growth this year and a first decline of 4 in 2007.

The Bank of France is concerned

The immediate signs of deceleration are still scarce. Fnaim speaks of a decline of 1.1 of the price in August in the former. A greater inflection emerges in the nine, with a decline in sales in June and July from 9 in the hexagon and even 21 in the Paris region. Time to market elongate six to eight months. Nothing of much concern. "The volume of our credits to the habitat in the first half was still growing by 13 and we have not found the slightest sign of a rise in claims," said the President of the Credit Foncier de France, François Drouin.

Yet, the Banking Commission launches a warning. "Relaxing persistent conditions for the granting of loans, including by lower requirements of personal contribution, combined with very low margins, could have negative effects on the solvency of households and financial institutions, as real estate or interest rate market conditions are more favourable as that currently", cautioned in June Christian Noyerthe Governor of the Bank of France. Exceeding EUR 134 billion last year, habitat credit recorded an annual growth of 20 since 2003. "It reached levels equivalent to loans... before the latest crisis," notes a former promoter with malice.

The duration of the loan is extended

So far, banks have remained deaf to the warnings. François Drouin, however, recognizes that its teams see spend more in addition to records "limits". In fact, the French have never been also indebted. Less than 50 of the income available crude, the rate of indebtedness is passed to 65, above history. It came in a danger zone "I sold to a woman of forty-two years that is debt on more than twenty years, this is crazy!" says the young trader Parisian who has recently his studio in a popular neighbourhood in the 18th arrondissement. Many transactions would not have been possible without the lengthening of the duration of the loans. She now 17.9 years on average and three years for a primo-visiting, said the beeps, who studied the records of Empruntis online broker. On the personal contribution, he would more than 11.1 of the amount of the transaction, against 14.7 three years earlier, while the median interest displayed by Empruntis rate rises to 3.6. However, points out Olivier Eluère, Economist at Credit Agricole, effort rate remains between 25 and 30, "a high but acceptable."

Acceptable if rates remain moderate. Gilles Moëc, an economist at the Bank of France, j. indeed for its part that "the market is tense and this close characteristics from those observed on the eve of the reversal of the real estate cycle at the beginning of the 1990s". The ability to purchase is seriously eroded: it would be more than 48.5 m2 for primo-homebuyers, against 59 m2 in 2000, according to the national flag developed by Credit Foncier and Essec.

What would happen if interest rates rise Bankers are reassuring. In France, the bulk of debt is still at fixed rates. And systems of variable rate loans provide a retreat of the due date of the loan rather than an increase in the monthly payment. Finally, the tradition is not to take on the value of the property, but on a deposit, so unlike the Anglo-Saxon countries, the French market is protected from financial hazards. Nevertheless, to a situation of employment still although fragile, the French are perhaps less indebted than the English, but not necessarily better armed, says Patrick Artus, Chief Economist at CDC Ixis. Rate risk is framed, but the vagaries of life divorce, illness, unemployment outside the scoring of the banks. "Unforeseen households have little reservations", is alarm Marc Touati.

A "sociological crisis."

Apart from the désolvabilisation of households, the current situation is however quite different from that of 1991. At the time, speculation was fueled by the developers and merchants of goods, which were turning the market at any speed, anticipating astronomical rents and bet on a resumption of inflation, which has not occurred. Expectations were particularly unrealistic in real estate offices. Today, rents in tertiary are wise, while the boom in the residential has been driven by the real needs of the population. "There a sociological housing crisis needs have long dumped, which explains the robustness of the application." "For example, each divorce can be converted to a 0.7 additional housing need," says François Drouin.

"We are not a market speculators, but users", reiterate the players in the sector. In 1990, the professionals and their banks which bore the risk today, households. "But it is worse, said Marc Touati, a housing crisis is more serious than a crisis of the Office.". For Alain Béchade, President of Atisreal, there is not what dramatize: "economists are concerned about the decline in the rate of savings, but housing is an investment and therefore never the French have even saved.". If prices fall, individuals have to make the round back and wait.

Shortness of the application

A market of users, fixed-rate credits, debt rather moderate compared to neighbouring countries, low banking risks, unmet needs, the French market would be of bronze As long as interest rates remain low, including long rates which benefit from the abundance of global liquidity for investment, it is not unreasonable to bet on a simple cooling. Professionals do not less want in the European Central Bank to moderate his zeal for increase in rates.

In any event, demand is expected to lose steam, because with prices exclude many candidates for the purchase, while the seduction fans, who have invested in rental housing, have no doubt already full. Prices would then taken down. That wish, moreover, many actors. "What matters for economic growth, it is the number of transactions", said Gilles Moëc. Because, today, there is little systemic risk to an over-indebtedness of households, but rather to social risks, on the basis of the exclusion of young people in access to housing. This term, can be very expensive to the community.